FEATURED ARTICLES ABOUT TAX YEAR - PAGE 5

A law lowering closing costs in Maryland took effect in part July 1, but homebuyers may have to wait months -- or even years -- for the intended benefits.The first overhaul of Maryland's property tax system in two decades, signed into law in May, is expected to save many homebuyers thousands of dollars at settlement time and bring costs in line with those of neighboring states. The real estate industry views the reduction in upfront costs as a first step toward energizing a stalled housing market and boosting economic development.

Even though Tax Season 2004 is over, next April 15 will be here sooner than you might think. To help get a jump on next year, baltimoresun.com's tax experts -- Jim Dupree of the Maryland office of the Internal Revenue Service in Baltimore; Nicole M. Harrell, head of her own accounting firm in Baltimore; and Gregory S. Horning of Stout, Causey & Horning in Hunt Valley -- respond to one reader's e-mail, adding tips that could apply to most filers....

Maryland homeowners could lose out on hundreds of dollars in tax bill savings if they miss a deadline that's a week away. Many may not realize they must sign up for the Homestead Tax Credit, which saved the average Baltimore homeowner more than $1,000 in the most recent tax year. To receive the credit in property tax bills starting this July, homeowners must sign up by Dec. 31. "When you say the words 'tax credit' to some homeowners, it doesn't really resonate what they're getting out of it," Baltimore City Councilman Nick Mosby said.

In the latest battle between the states, officials in Virginia and Maryland are squaring off over whose budget-balancing prowess is greater. First, after Virginia Gov. Bob McDonnell announced his state ended the year with $544 million in cash, $234 million more than expected, the Republican Party there crowed that Maryland Gov. Martin O'Malley was, at the same time, predicting a $1 billion shortfall and floating the possibility of tax increases....

City Councilman William H. Cole IV said Wednesday evening that his office told state assessors several years ago that they had mistakenly valued a large Federal Hill home as if it were a fraction of its true size. And Cole said others in the neighborhood had complained as well, yet the error was not fixed. "For whatever reason, this house has slipped through the cracks nine different ways to Sunday," Cole said during a hearing at City Hall. Assessment officials could not explain why the tips went unheeded.

The number: $15.9 million What it is: The amount of money Mayor Stephanie Rawlings-Blake says the city's Billing Integrity Unit has "recouped" since 2011 by catching erroneous tax breaks and other tax billing problems. How it breaks down: The mayor's office says the unit has sleuthed out errors with four types of tax breaks, whether because the break was too high or the property didn't qualify. Fixing those errors, officials say, has generated major additional tax revenue for the city.

If you want to know who in Baltimore benefits most from the homestead property tax credit, look north. Of the 100 biggest discounts in the city this tax year, more than 75 went to homeowners in and around the wealthy North Baltimore neighborhoods of Guilford, Roland Park and Homeland, tax records show. Another 15 or so recipients ring the waterfront. The average break for these homeowners is $10,430, or 10 times the citywide average. As a group, they've avoided paying a combined $1 million this year.

An estimated 20,000 households in Baltimore City are missing out on tax refunds, leaving unclaimed some $50 million that advocates said could help lift them out of poverty. IRS Commissioner John Koskinen marked Friday, the first day his agency started to accept 2013 returns, by urging Baltimore families to seek free tax preparation help. "It may take me a little while to convince people we're from the IRS and we're here to help you," Koskinen said to laughs at a press conference hosted by the Baltimore CASH Campaign.

The ink was barely dry on Baltimore City's new property tax bills when we spotted fresh errors in the way some historic tax credits were recently calculated. If this sounds familiar, it should. On June 24 The Sun published the results of an investigation that found the city has failed to collect millions of dollars in potential revenue because of chronic errors and miscalculations in the historic credit program, which offers tax breaks for historic renovations. With a new tax year starting July 1, we checked to see if the problems had been fixed on recently mailed bills.

Home values in Maryland communities reassessed by the state this year have fallen an average of 17 percent since 2008, a sizable drop but smaller than in the last two rounds of property evaluations. Nine out of 10 residential properties that were reassessed lost value, the state Department of Assessments and Taxation said Tuesday. Some homes were more valuable because their owners renovated. But assessors say they're seeing signs of stabilization in some neighborhoods - a new trend.